Google’s Innovation

December 4, 2006 · Posted in advertising, business, innovation · Comment 

Most people think that Google’s big innovation is their search engine. Its fabulous technology and has drastically changed the world for the better; but, the bigger innovation is more subtle. It’s just a concept. It isn’t a technological innovation it is a business innovation. Google’s Innovation is their business model.

What Google realized was finding stuff on the ever-increasing World Wide Web was time consuming. Finding the stuff you really wanted was hard and going to get harder. Their solution was a sort of popularity contest. By looking at the links to content they could categorize it and rank it. The Google search engine is a popularity index.

Pretty cool idea. You could let real users categorize and rank content for you. Build an automated tool called a spider that cataloged this information and you can save people time and give them better search results. And by offering this cool new tool for free Google became popular.

Now I’m going to point something out. Google’s popularity was growing exponentially but their own search engine probably wouldn’t have ranked them very high. The reason is that when Google started out people didn’t post that many links about Google. What people did was tell their friends in person, on the phone or in e-mail. I remember the first time I used Google and I remember deciding to make it my home page. Google had gotten the most valuable links on the real world wide web of human opinion.

So how could a free online tool make money? Google made money and is still making lots of money by selling the thing their search engine operated on, popularity.

Google sells targeted advertising. What is advertising if not lending your popularity to someone else for a fee? And Google was now the worlds leading popularity broker so they could start cashing in.

Think about this. Google is at the center of popularity. They report which pages are the most popular for the criteria selected. This in turn increases the popularity of the pages. Then Google sells advertising on their search engine using their AdWords service. And they expanded AdWords to millions of pages all over the world through AdSense where publishers get paid to share a bit of their popularity in the form of some space on their pages for Google AdSense ads. And of course Google gains in popularity every step of the way.

So you can see that Google’s Innovation was turning popularity into a commodity. Their technology made this possible but the concept could exist and has existed since the beginning of time. Anyone at any point in time could have theorized of a global system to buy and sell popularity. And there are probably many ways to have built such a popularity market. As we say in the research and development business, the concept is proven, the rest is just engineering.

Just to make this perfectly clear, I’ll tell you about my friend Catherine Thomas, casting and locations director. She has done dozens of movies, hundreds of commercials and TV shows working with stars including Bruce Willis, Eminem, 50 Cent and Billy Crystal. And she has worked on hundreds of TV shows and commercials. What she does is very interesting. I modeled (see articles on NLP) her techniques and drastically improved my own life. If she likes you she will say this phrase in every conversation, “let’s get together and have a drink.” Her entire life is built on popularity. Her stock and trade is socializing.

If you meet Catherine for cocktails it will be at a club where she knows the owner and probably several other people as well. If she goes off to the bathroom expect a long wait. No it’s not the call of nature from all the white wine, she will have run into or met someone and started a conversation with them. As she puts it everyone has a story and she just loves to hear everyone’s story. She remembers them and they remember her.

So when a producer needs a location for a film and interesting real people for extras and minor roles they call Catherine Thomas. She calls up one of her “good friends” and everything is set. Of course lots of people strive to be one of Cathy’s “good friends”. In her head is a database of contacts, she never writes down phone numbers preferring to memorize them. She always knows a fabulous party, cool person and hot spot and she is probably on the VIP list.

Now think about how closely Cathy’s social network mirrors Google. She is immensely popular and helps others be popular. She keeps a huge list of people and places. People go to her to find the right person or place based on their requested criteria. Cathy does the introductions and collects a fee.

The only difference between Cathy and Google is the level of automation used by Google. If you can boil down a process to its essential elements you are poised to find world changing innovations. That is one part of what the OutCompete process does.

Action Items:

  • Think of the steps needed to perform one of your key business processes.
  • Make a list of other businesses that perform the same task.
  • Make a list of tools and techniques those businesses use to perform the tasks you have in common.

Schedule an OutCompete assessment of your business.